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The Wrong War Over eBooks: Publishers Vs. Libraries

Libraries, like other consumers, should be free to buy any published e-content at competitive prices, to keep these items in their collection, and to loan them to their patrons. Anything less violates basic democratic principles …

Libraries and big six publishers are at war over eBooks: how much they should cost, how they can be lent and who owns them. If you don’t use your public library and assume that this doesn’t affect you, you’re wrong.

In a society where bookstores disappear every day while the number of books available to read has swelled exponentially, libraries will play an ever more crucial role. Even more than in the past, we will depend on libraries of the future to help discover and curate great books. Libraries are already transforming themselves around the country to create more symbiotic relationships with their communities, with book clubs and as work and meeting spaces for local citizens.

For publishers, the library will be the showroom of the future. Ensuring that libraries have continuing access to published titles gives them a chance to meet this role, but an important obstacle remains: how eBooks are obtained by libraries.

This column is the first in a two-part series about libraries and their role in the marketing and readership of books. This first part addresses the present conflict. The second part will look forward to the future for libraries and publishers and the important challenges that they must address.

The solution to the current pricing problem lies in understanding that the argument publishers and libraries are having is the wrong argument. It is based on the paradigm of the printed book and as such presents a series of intractable challenges for both publishers and libraries. By changing the model for pricing an eBook, both parties could find a clear and equitable resolution to the current impasse.

The Issue

Do libraries increase book sales or cannibalize them? This is the issue at the heart of the struggle between libraries represented by the American Library Association (whose president is Maureen Sullivan) and the Big Six publishers.

The current struggle is taking place in a landscape that will be familiar to those who followed the travails of the music industry over the last decade. Publishing is changing dramatically as it tries to cope with the rise of eBooks and the increasing power of Amazon, the decline of bookstores and a flood of low-priced indie titles. In spite of the good year that Random House is experiencing (anticipating a merger with Penguin and just having paid employees a $5,000 bonus each thanks to the success of once-indie author EL James’ Fifty Shades trilogy), most publishers have found it difficult to maintain sales and profitability in the current environment. Whether they’re doomed or not is debatable, but no mainstream publisher is comfortable in the current environment.

The landscape is also shifting for libraries. The Information Age has posed numerous challenges to the public library, as Steve Coffman adroitly chronicles in “The Decline and Fall of the Library Empire.” Libraries have struggled to understand their role in communities as technology has changed. In addition to encouraging children to read and lending books, they have migrated from providing access to online databases to cataloging the web then providing computer terminals and now broadband access as the needs of the citizenry for information has changed. The shift in reading towards eBooks presents a particular problem for them because it’s happening with startling rapidity and presents significant technological challenges.

In addition to the central issue of pricing, libraries are struggling with the copyright implications of eBooks, their role as curators and promoters of reading in an age where publishing is exploding, dealing with technology intermediaries and gaining access to the newly available wealth of self-published works.

The Library Perspective

The central issue for libraries is simple: they believe that withholding eBooks from libraries entirely, pricing them higher or limiting lends all undermine the library’s core mission. Robin Nesbit, of the Columbus (OH) Metropolitan Library System told me that although her eBook circulation of 500,000 lends annually is only 3 percent of the system’s total, that number is growing by more than 200% a year. “Plus it’s at least 10% of our budget.” Between the cost of eBooks and a technology component, providing access to eBooks is three times as expensive for her as physical books.

This pricing pressure is significant and it’s being felt across the country. Jamie LaRue, Director of the Douglas County Libraries in Colorado told me that,

I saw a decrease in use that was hard to explain because our libraries are busy. Then I looked at our inventory and realized that the problem is that as we shift our dollars to eBooks, I am buying fewer items because the prices are so much higher.

The challenge to libraries is not insignificant. Four of the six publishers are not providing eBooks to libraries at any price. The other two – Random House and HarperCollins lead the industry with two different models. Random House adjusted eBook pricing in 2012. While the prices on some books were lowered, the most popular titles increased in price – some dramatically. Author Justin Cronin’s post-apocalyptic bestseller “The Twelve” whose print edition costs the Douglas County Libraries $15.51 from Baker & Taylor and whose eBook is priced at $9.99 on Amazon was priced at $84 to Douglas County on October 31st.

HarperCollins meanwhile has adopted a different model, selling eBooks to libraries at consumer prices but electronically limiting them to 26 lends and then requiring that the book be repurchased. Robin Nesbitt sees this as fairer to libraries, but she points out that it’s still much more expensive than print books, “I get forty to fifty lends from a bestseller in library binding. But at least they’re playing.”

And that’s the bigger problem. As detailed below, the rest of the Big Six aren’t playing – at least not nationally. That’s a big warning sign for libraries, as fully 80% of lends – and an important part of their traffic – comes from bestsellers. While it seems likely that most of the other publishers will eventually play, the terms may be worse than those offered by Random House and HarperCollins.

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Thanks so much. I think you may be confusing the message for the medium. But for starters, let me say that I fundamentally agree with you that the ideal situation would be for libraries to own digital books and to archive them in perpetuity, preserving them for the future. I strongly support the notion that the “First Sale” doctrine should apply to digital books as a matter of public policy.

The problem is that under the existing interpretation of the law as well (as well as the terms of the licenses between publishers, intermediaries like Overdrive and libraries, the libraries do not own books themselves. A license is by definition a rental, a wealth transfer. So given the current law, the question to ask is whether licenses as they exist today are the optimal wealth transfer for libraries, publishers and readers. Given the prohibitive switching barriers that current licenses create (see the trouble the Kansas State Library system had moving from Overdrive to 3M as a digital technology provider) a rental model would create fewer long-term problems for libraries.

Libraries do still have an important civic role to play in the future, and I don’t think you should consider the payment of the library to the publisher as immediately inhibiting the library’s relationship with the young reader or the mature patron. However rather than fully addressing your concern in a brief comment I will tell you that it’s something I will return to in the follow-up to this article next month.

Thanks, David. The medium and the message are indeed confused, and I struggled to make my point. Even copyright law is moving in a direction that entangles the medium and the message ever more, as if the ultimate goal were to have every instance of a message be consumed on a platform of commerce, never to enter the public domain. I fear the pay-per-use model ultimately won’t work for public libraries because it changes the civic model (for lack of a better phrase). The public no longer shares in the ownership of something. Instead, tax money is doled out in some new way: ten songs per month per child (sort of like twenty-two free lunches per month per child), five e-books per week, two streaming videos per day, all delivered to the privacy of one’s home. The numbers look something like what happens today with physical materials, but there’s something very different about it, even if I can’t yet put my finger on it. It makes the public library into something else, something taxpayers may well find odious, ultimately to the detriment of our civil society. However, if I can’t explain it, perhaps there’s nothing to it. I’ll keep trying.

Excellent article! As a public librarian it has been frustrating to witness this misinformed war between publishers and libraries. Unfortunately many librarians and publishers can’t seem to grasp that printed books and eBooks are radically different.

One of our joint hang-ups is trying to fit eBooks into existing hard copy book processes (purchasing/circulation). For example, applying “Right of First Sale” ownership concept to eBooks. Right of First Sale proponents for eBooks are living in the paper past. Digital formats are not about physical possession, they are about legal guaranteed access to content. Content creators deserve compensation, as do companies that distribute and host resources. Libraries deserve the opportunity to purchase access to content without artificial restrictions.

Even a paper collection, especially in a public library, is not forever. Printed books do not have infinite shelf life in a public library collection. Books come and go, either through wearing out, disappearing in circulation never to return or being withdrawn to make room for new books. What libraries need is guaranteed legal access to econtent for a specific period of time. That brings up the very important point that libraries need contracts that will not allow publishers/distributors to limit or remove content access without notice.

Libraries need to make clear our commitment to authenticating our users, supporting copyright laws, and paying for access. Publishers/distributors need to worry less about transaction friction and help create a practical future for managing content access that includes various pricing structures based on defined legal guaranteed access. Hopefully a truce will be declared in this war or both parties will become increasingly irrelevant. Publishers will be devoured by Amazon/Apple and public libraries will give up on providing content and instead become “spaces” for various activities.

Perhaps another missing idea could be the idea that the current system we have does not require modification, but a complete overhaul. When we limit ourselves by saying the current system must stay the same while we figure out ways to force new technology into it we do ourselves and the community an injustice. If we get rid of the box and start thinking as if we are a new system better answers may emerge.

Simple pass a law that makes e-books the same as regular ones. You pay the same as a physical book and you get the maximum number of borrows that a physical book would get. Say 75 – 100. Anybody who does not like this will not sell anything to any library.

Thank You for this article. It shows us a possible way out of this conflict.

The conflict is clear: book-lending has ever been one of many business models. But it was not attractive for publishers because of the logistic problems. Thats why there has nearly never been a conflict between commercial and non-commercial lending-models. With e-book lending via internet, the commercial lending starts to be one of the main business models for publishers, especially if we take the megatrend “access instead of buying” into account.

The business-model lending has two types: reader-paid or public-paid. There are many similarities to the open access discussion. The pricing-models can be pay per view, pay per lending-period or a flat rate for a certain catalog. The only difference between reader-paid and public-paid: a public-paid offer is cost-free for the reader and therefore it will create sensible more frequency (per user) than the commercial offer. Thats why the price should be proportional lower.

The UTB (a german publisher) proposes for three years now an ebook-licensing for university-libraries with a pay per view model. We had a lot of problems at the beginning, as mentioned in the comments above, with libraries fear not being able to control the budget over the year. So we billed every year the price for the usage-volume of the year before. This makes it calculable, gives the possibility to negotiate the tarif on the expectations of the future development and means in fact a delay of payment of 360 days. As long as the usage goes up, this model will do. In some years, we will have a saturated market an the numbers will be stable and the budget be easily calculated.

I propose a differentiation of the tariff for public libraries: it should be nearly free for usage in the building of the library and be with a special discount for social or educational matters. It can be higher the more a user is away from the community who finance the public library so the community pays for the own purpose, not for other communities.

Thanks for the comment. I find your observation about your experience with UTB illuminating. Clearly the key issue with a pay-per-use model for libraries is budget control. I also find your suggestion about in-library versus out-of-library usage intriguing.

Okay, I’ll give a library users perspective. I have found that when I sign up to borrow an e-book, often there is a long waiting list–say upwards of 20-40-60 (or more) people in front of me, waiting to check it out. Typically each patron gets 2 weeks to read the book, and so I’m still waiting for some of these books.

Limiting lends is ridiculous and downright greedy. Physical books are checked out many times during their “lifetime”, so why on Earth would anyone lend only 26 times, and then charge again?

The problem with this is two-fold: (1) it just makes people think that these publishers are greedy and all they care about is money, and (2) it discourages people from buying the book themselves because they are so mad about the wait, or the publisher, or the author that allowed the publisher to make the decision in the first place.

Why not give unlimited lends? It’s not like the publisher loses out, since the wait is the wait is the wait. You can’t stop that, but you can encourage people to buy the book, and feel good about it since if patrons really want a book, often they will go out and buy it, especially if they have to wait a long time through the library system.

Now from an independent book publisher’s perspective, I don’t care how many lends the libraries give out. The more people who read my books, if they like it enough, they will likely want a copy for themselves. Win-win.

I think for publishers the question is whether lending eats into sales. The Pew research suggests that it does but only for a narrow swath of titles and a certain percentage of customers who would buy the book instead. For the rest of readers and most non-bestselling books, lending helps the publisher. This may be more true in the future than it has been in the past.